Infrastructure Finance Jobs Heating Up
The push to rebuild America’s decaying infrastructure is gaining momentum. California Governor Arnold Schwarzenegger, Pennsylvania Governor Edward Rendell and New York Mayor Michael Bloomberg recently announce the formation of a non-partisan national coalition that will lobby for at least $1.6 trillion over the next five years to invest in the country’s rotting infrastructure. ”America needs $1.6 trillion worth of infrastructure over the next five years, yet federal investment has been cut in half as a percent of gross domestic product since 1987,” said Governor Schwarzenegger. “This is disastrous because without adequate infrastructure to quickly and safely move goods and people our economy and our traffic will stop dead in its tracks.”
The evidence is everywhere of the large and growing gap between infrastructure needs and historical rates of investment, according to Deloitte. The firm however, says that private investment in public infrastructure - or public-private partnerships (PPPs) - has emerged as one of the most important models employed by many governments to rebuild the nation’s infrastructure. Deloitte reports that more than 25 states now have PPP-enabling legislation on their books. In short, private investment has become vital to the improvement of public infrastructure, and competition for capital has become fierce. Now, as global investors seek to capitalize on opportunities in infrastructure, executive search firm, A.E. Feldman, says infrastructure finance jobs are opening up for candidates with backgrounds in investment banking as well as experience in analyzing and executing structured financings. The most sought after candidates are those with experience in infrastructure transactions and environmental engineering
Recently, the American Society of Civil Engineers (ASCE) graded the overall condition of the nation’s infrastructure a “D” and recommended investing $1.6 trillion in infrastructure over the next five years. Roads, dams, wastewater, drinking water and navigable waterways top the list of infrastructure concerns.
Since 1990, the total vehicle miles traveled on the nation’s highways have jumped by more than 35%, according to research compiled by Deloitte. The firm says that growing transportation needs require major investment: $40 billion annually for roads alone. Demand for public transit, has increased 23% over the past decade. According to the U.S. Department of Transportation, $20.6 billion in capital investment is needed each year just to maintain current facilities. And the U.S. Environmental Protection Agency (EPA) estimates that local water and sewer infrastructure will need investments of $300 -$500 billion over the next 20 years.
Across the country, PPPs are now being considered for an increasing number of projects, according to Deloitte. Texas is relying on the PPP approach to develop the Trans Texas Corridor, a massive new statewide transportation network that includes roads, commuter and freight rail, and utilities infrastructure. Virginia is negotiating PPPs for several new projects, including the Dulles Rail Corridor, high occupancy toll lanes and reconstruction of tolled truck lanes. Deloitte concludes “the PPP trend is global, accelerating and encompassing a broad range of infrastructure sectors.”
“We have an infrastructure crisis,” says New York Mayor Michael Bloomberg. “Nonstop television showed us in New Orleans when the levees broke, and Minneapolis when the bridge collapsed. But the governors and the mayors of this country every day see at an operational level bridges that are rusting away, and tracks that can’t carry high speed trains, and power transmission lines that can’t keep up with demand, and airports that need new runways, and water lines that need backup systems, and sewage plants that leak into the rivers and the oceans. Over the long run we really are going to risk losing our place as the world’s leading super power. China, Japan, India, Dubai, Malaysia, Europe, all of them are investing in modern infrastructure at higher rates than we are here in the United States.”
